Arbitration Cases Weekly Round-Up: 23 To 29 October, 2022

Execution Of Agreement, In Bid Document As Condition Precedent; Failure To Execute, Not A Concluded Contract: Bombay High Court

Case Title: Kalpataru Limited versus Middle Class Friends Co-operative Housing Society Limited

The Bombay High Court has ruled that where reference to a future contract is made in the tender documents and in the Letter of Intent (LoI) issued to a successful bidder, in such terms which shows that the parties do not intend to be bound until the said contract is signed between them, there is no concluded contract between them which can be specifically enforced.

The Division Bench of Justices R.D. Dhanuka and Kamal Khata added that the terms and conditions of the contract, which were not agreed by and between the parties, cannot be drafted by the Court or the arbitrator for incorporating them in the agreement. The Court ruled that it cannot re-write a contract or suggest any conditions of a contract to be incorporated, by passing an order against the parties.

Delhi High Court:

Administrative Mechanism For Resolution Of Disputes' Is Not A Substitute For Arbitration: Delhi High Court

Case Title: Prasar Bharti versus National Brain Research Centre & Anr.

The Delhi High Court has ruled that the Administrative Mechanism for Resolution of Disputes (AMRD) is not a substitute for arbitration in cases where there is an arbitration agreement between the parties.

The Single Bench of Justice Anup Jairam Bhambhani observed that the party invoking the arbitration clause fell within the scope and ambit of the AMRD, under the Office Memorandum No. 334774/DoLA/AMRD/2019, dated 31.03.2020, issued by the Ministry of Law & Justice, Department of Legal Affairs. However, the Court held that the AMRD is only a mechanism for possible settlement of disputes between the governmental organizations and not a substitute for arbitration.

Arbitration Award - Jurisdiction To Allow Any Claim Can Be Challenged If Question Of Fact Is Not Involved: Delhi High Court

Case Title: M/s. Manraj Enterprises versus Union of India

The Delhi High Court has ruled that a claimant cannot support his claims on grounds that were not urged before the arbitral tribunal. However, the Court has held that if a question with respect to the jurisdiction of an arbitral tribunal to award any claim is raised, which does not involve deciding any question of fact, the party challenging the arbitral award is not prohibited from raising such grounds which were not raised before the arbitral tribunal.

The Bench of Justices Vibhu Bakhru and Amit Mahajan reiterated that a contractual clause, which bars payment of interest on Earnest Money Deposit, Security Deposit or on other amounts payable under the Contract, would also bar award of pendente lite interest by the arbitral tribunal.

Madras High Court:

Arbitral Tribunal Can Award Interest On Security Deposit If The Clause Prohibiting Such Interest Was Not Specifically Pleaded: Madras High Court

Case Title: The Union of India versus R.K. Constructions

The Madras High Court has held that the arbitral tribunal can award interest despite there being a contractual prohibition if no pleading as to the prohibition was made by the aggrieved party.

The bench of Justice Senthilkumar Ramamoorthy held that a party cannot rely on a Clause under GCC for challenging the arbitral award for awarding interest contrary to the said clause if it had not taken such an objection before the arbitral tribunal during the arbitral proceeding.